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8 February, 20:46

A vacant lot acquired for $333,000 is sold for $642,500 in cash. What is the effect of the sale on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders' equity?

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  1. 8 February, 21:05
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    assets = $309500

    liabilities = 0

    stockholders' equity = $309500

    Explanation:

    given data

    acquired for = $333,000

    sold = $642,500

    solution

    we get here effect of the sale on the total amount

    when assets is decrease then cash and retaining will increase

    so here

    (1) assets effect is increase than amount will be $642,500

    - $333,000 = $309500

    (2) liabilities is no change so amount = 0

    (3) stockholders' equity is increase than amount will be $642,500

    - $333,000 = $309500
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